YIP: Direct % of rewards towards Ethereum public goods funding

[banteg]

Summary:

Funnel some small percentage of rewards towards matching Gitcoin tech grants. Gitcoin uses a quadratic funding model, so the weights for grant matching are determined as a sum of square roots of all donations. A project with a number of small supporters can get the same matching as a project with a few large whale supporters. That helps to amplify small voices and give adequate support to community-favorite projects.

Abstract:

If implemented, a percent of rewards that goes through TreasuryVault will be redirected to Gitcoin Tech Grants matching. Yearn will become a matching partner of Gitcoin and help the ecosystem its built upon to thrive further.

Motivation:

Quardatic funding (explainer, paper) model has been considered a wildly successful way of funding public goods and ecosystem projects. Here are some reviews of Gitcoin’s previous funding rounds:

• Round 3 Review
• Round 4 Review

• Round 5 Review
• Round 6 Review

Becoming a matching partner and not settling upon specific projects will help Yearn to keep neutral. The donors and supporters will be the ones who determine which projects get more matching.

Specification:

If ratified, the easiest way to achieve the result is to create a middleware contract that splits rewards between Governance and Gitcoin wallet. To activate it, these transactions will need to be called:

• treasury.setGovernance(grants) to redirect treasury.toVoters() output to grants middleware
• ygov.setRewardDistribution(grants) to enable notifyRewardAmount from grants contract

Implementation:
TBD

Poll:
Signal support for 0-5% of rewards directed towards grants on vote.yearn.finance

[Seoul]

this is an easy yes for me.

founder of gitcoin can be found here on twitter: https://twitter.com/owocki

the dude has built something awesome that helps support the whole ethereum ecosystem and i think taking a small percentage to contribute to that would be beneficial to yfi and eth if we are thinking long term.

[SuttonBrothers]

I’m voting rn for it, one of the best proposals on the community.

[banteg]

We can also make the splitter contract more flexible by specifying multiple addresses and distributions:

• so we can say [ygov, gitcoin], [9800, 200]
• and then say [ygov, gitcoin, ygrants], [9800, 100, 100]

The flows would be adjustable later via YIPs.

[alejoamiras]

Undoubtly yes. If you are on the edge and don’t see reasons as to why: Try to understand the composing elements of ETH. YFI stands in the shoulder of “smaller” projects, this gitcoin grant would enable much more of this projects. Liquidity and network effects are kings

[Juanma]

1% for like 500$ daily donated. For.

[saltyfacu]

I like the idea to support small projects in the ecosystem. How are the sponsored projects chosen?

[PEPO]

4% (1M USD) seems fair for what we are trying to achieve here.

We could also have a structure just like the one from the Multi-sig Treasury, (1M/500k USD cap until we vote how much should be given for grants on that specific round), flow:

edit this might create a conflict of interests, but it’s up for discussion

I vote for this proposal going through as long as % are adjustable.

[owocki]

Hi from Gitcoin.

We’re excited to see this proposal; and would be happy to run this at cost (100% of $$$$ going to public goods, minus a negligible amount for gas costs).

In addition to supporting the Ethereum ecosystem, I advise the ecosystem also consider running “yearn-specific” public goods rounds. The idea here would that we create a yearn category in our system, and people who have partnered with yearn or built on top of yearn can solicit funding from that pool.

I want to PROVE to the community that contributing to public goods is positive sum; and that they’ll get in more than they put out. I’d be interested in making $YFI a case study; showing how a profit-driven network (or organization) can create more profit & returns by contributing to public goods. The publicity will be very high ROI, but I believe the ecosystem effect on running a yearn-specific round would be EXTREMEly high too.

Any questions, let me know.

Kevin

[owocki]

Btw I’m attaching below some info on Gitcoin & the rounds we’ve done so far and on quadratic funding below:

Our mission is to “Grow Open Source” and provide economic opportunities for developers. We’ve done about $6.5mm in funding for developers on Gitcoin. (Stats here https://gitcoin.co/results )

One of our products is Gitcoin Grants, which is being used to fund development in the Ethereum space in a way that’s decentralized + democratic + community driven.

With Gitcoin Grants, we raise a matching pool (the last one in ETH was $175k). We then distribute the matching funds along with the community.

But here’s the rub: the breadth of contributors matters more than amount funded. This is super powerful because a $1 contribution can yield up to $150 in matching funds (if the grant is popular with a lot of people).

History of Gitcoin Grants on Ethereum, by the numbers

Gitcoin Grants Round 1, Q1 2019. 200 Contributions - $38k raised.

Round 2, Q2 2019. 400 Contributions - $56k raised:

Round 3, Q3 2019. 2000 Contributions - $270k raised.

Round 3 we built a UI that estimated how many matching funds your donation would get.
Vitalik Buterin’s Review of Round 4 at vitalik dot ca

Round 4, Q1 2020. 5000 Contributions - $344k raised.

Round 4 included a Media Matching Fund (and plenty of controversy):
Vitalik Buterin’s Review of Round 3 at vitalik dot ca

Round 5, Q2 2020. 8000 Contributions - $475k raised.

Round 5 included a Public Health Matching Fund, Negative Voting, Flagging, Round over Round Subscriptions, and of course, more controversy:
Vitalik’s Review Forthcoming

More Details / Background

Our work in administering Grants rounds has been an important part of scaling the Ethereum ecosystem because

1. It’s proven: We’ve done $2.5mm worth of Gitcoin Grants already.
2. Every round creates a signal about what projects the community cares about.
3. It is more decentralized than running a centralized grants program.
4. It is more scalable than running a centralized grants program.
5. It serves as a marketing schelling point for people to make noise about, and support, each other’s work.
6. It pushes power to the edges, because it, as Glen Weyl puts it, “Is the mathematically optimal way to fund public goods that a broad swath of the public cares about”.

You can read more about our work funding the Ethereum space below

• The CLR Paper (which I can’t link bc of Discourse trust levels, but you can google it) by Vitalik Buterin and Glen Weyl covers all the design details of the mechanism, but basically the TLDR is that it’s a mechanism that distributes matching funds for community donations.
• Gitcoin Grants Wrap up Posts at vitalik dot ca

More about me below

If you’re in Boulder Colorado, you may recognize me as the organizer of the Boulder Blockchain meetup. I’ve been in the space for a bit, launching adblock to bitcoin and pytrader back in 2015. I’ve also done some mining, building a mining rig which I used to mine on the ETH Mainnet in 2017, and actually I ran it on the ZEC mainnet launch day (but didn’t actually successfully mine a block – wahh!).

In 2017, I started work on Gitcoin - A double sided marketplace that connects knowledge workers to people who want to hire them. Our mission is to Grow Open Source and create new economic opportunities for coders.

Find me online on twitter (I’m @owocki)

More about Gitcoin Below.

Gitcoin’s mission is to Grow Open Source and help devs find new economic opportunities.

Gitcoin is a double sided marketplace that connects workers to people who want to fund them. Our mission is to provide economic opportunities in open source to software developers.

There are many ways to do this, and gitcoin offers a few different products to enable this:

• Virtual Hackathons: basically a physical hackathon but online & worldwide. sponsors post prizes and people compete to earn them by building stuff to the spnosors specification.

• Grants a better way to fund innovation in your ecosystem. grantees can create a fundraising page for “the great work they’re already doing” in the space, then raise $$$ for that work.

• Accelerators - We help budding crypto entrepreneurs create lasting crypto networks, with a combination of history, philosophy, and technical leraning.

For more info on Gitcoin, checkout Gitcoin dot co

[overanalyser]

@saltyfacu
YFI would donate to the matching pool. This would be available to all the projects in a category.

The matching is based on the individual donations and the quadratic distribution (10 addresses sending 1 DAI each generates a larger matching grant than a single 10 DAI donation from a single account).

So, we as matching donors don’t need to decide where the money goes, we leave that to the algorithm, and the wisdom of the crowds.

[Jolly]

This makes me much more interested in the proposal.

I love the idea of giving back and supporting the larger defi ecosystem, but I do not support the idea of yearn being a neutral matching partner.

I want to see the following:

• Have this go to projects that will help yearn directly. Companies support open source, but usually the projects that are useful to them!

• This have a built in limit (dollars/time). I prefer the community try this out for a round or two, evaluate the results, and then vote if we want to see it continue.

[PEPO]

Just to add context for this matter:

1. 1M USD (4%) towards public funding is a drop in the bucket, lots of team building stuff without any support
2. Andre was one of the people building alone in the space with 0 support
3. Yearn community should understand the motive behind this proposal at its deepest

[overanalyser]

I’m definitely up for this.

A couple of thoughts:

• Should we make it time specific (i.e. x% of the overflow from until block Y [Last date for round 7] go into Gitcoin grants round?
• Should we divert the “community fund” into a separate wallet that the main multisig wallet holders distribute to various projects (in future gitcoin rounds as they occur)?

[saltyfacu]

Thanks! It’s super clear now.

[saltyfacu]

Funding the ecosystem is a great idea. I’d like to see the projects and people around Yearn being funded/supported. Yearn is in a super early stage and we should help people around us. So I firmly believe that we should put our energy there.

I don’t like the idea of institutionalized general funding like this at this stage of the project.

[Degenomics]

This is available for voting: https://vote.yearn.finance/yearn/proposal/QmTDiNtS8GWFTevbHKxUaZHRHDTkg6sJSsVJTGrkmDZ83U

[AnthonyBertolino]

Strongly For

As Kevin stated, I would love to see the first round be for Yearn Ecosystem - then moving forward it can be for general Ethereum Public Goods.

[amnesia]

https://www.fairlaunch.capital/

As well as gitcoin matching, perhaps using the focus of this team could amplify more important initiatives, more bang for buck early on. The next phase of public good funding could cast a larger net, targeted to start seems more impactful as rapid change is realized.